Norway’s huge sovereign wealth fund built on the country’s petroleum revenues suffered a 4.9% loss on its investments in the first quarter amid choppy financial markets.

However its manager Norges Bank Investment Management (NBIM) said in the interim report released yesterday it had beaten the benchmark index in the three-month period.

Trond Grande, NBIM’s deputy chief executive officer, said: “The first quarter has been characterised by geopolitical turbulence, which has also affected the markets.”

At the end of the reporting period, the Government Pension Fund Global (GPFG) had NOK11.66trn (€1.21trn) of assets in total, according to the report, though the rolling figure on NBIM’s website shows the value has fallen back somewhat since then to NOK11.43trn.

Three of the GPFG’s four asset classes ended March with negative returns while one – unlisted real estate – produced a positive 4.1% return, according to the statement.

Equity investments, which made up 70.9% of the fund at the end of March, finished the quarter with a 5.2% loss, while fixed income investments had a -4.8% return.

The GPFG’s allocation to unlisted renewable infrastructure assets – the asset class most recently added to the fund’s composition making up just 0.1% of it at the end of March – suffered a -3.3% return.

NBIM said the GPFG’s return was 0.66 percentage points stronger than the return on the benchmark index.

The fund received an inflow of NOK141bn in the first quarter, NBIM announced.

The Norwegian Government transfers its revenues from petroleum activities to the GPFG, which arise from various sources including the state’s direct holdings in a number of oil and gas fields, pipelines and onshore facilities.

Oil prices have been rising steeply recently, and according to the majority state-owned Norwegian oil firm Equinor, average Brent for the first quarter of this year was $101.3 a barrel – up 27% from the previous quarter.

But currency movements contributed to a NOK171bn decrease in the value of the fund, which is measured in a basket of currencies.

The government, which has been making significant use of GPFG money in recent budgets, made no withdrawals from the SWF between January and March, the report showed.

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Rachel is IPE's Nordic correspondent. She has long been a freelance writer, and over the years, has written for The Telegraph, The Independent, The Observer, AMWatch and elsewhere. In 2001, Rachel's personal finance book Kickstart Your Money was published by John Wiley & Sons.View full Profile

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